Virtual workplaces spawn new risks

Posted On: Mar. 29, 2015 12:00 AM CST

Mark A. Hofmann

Back in 1999, the late management philosopher Peter Drucker wrote an article in the Atlantic Monthly about the Internet called “Beyond the Information Revolution.” In the article, he wrote that the “truly revolutionary impact of the Information Revolution is just beginning to be felt.” That revolutionary impact? E-commerce, says Mr. Drucker.

“E-commerce is to the Information Revolution what the railroad was to the Industrial Revolution — a totally new, totally unprecedented, totally unexpected development,” Mr. Drucker wrote.

Of course, the revolutionary impact went far beyond e-commerce per se. Consider something you use every day that didn't exist in its current form until 2007. That's when Apple introduced the iPhone, which was followed very quickly by the Android. Here was yet another truly revolutionary impact of the Information Revolution. Within a couple of decades, we went from a mysterious and quite limited Internet to something that started as a gadget and became a necessity.

Remember, it took close to 50 years to get from the first steam engines used in manufacturing — where they were used to run looms — to steam-powered railroads. It took less than a generation to get from the early Internet to the smartphone.

Mr. Drucker may have foreseen something like this when he wrote, “It is likely that other new technologies will appear suddenly, leading to major new industries. What they may be is impossible even to guess at. But it is highly probable — indeed, nearly certain — that they will emerge, and fairly soon.”

What does seem to be certain is that nearly every new technology has served to speed things up even as the new technologies spring up ever more quickly. But unfortunately, that acceleration of adaptive technology has been accompanied by an acceleration in risk itself.

For example, during a panel discussion of the virtual workplace at Business Insurance's Risk Management Summit in New York earlier this month, panelists discussed how virtual workplaces — including mobile ones — have changed the nature of workplace risks for employers. Workers compensation exposures and reputational risks that would not have been imagined two decades ago during the infancy of the Internet now present clear and present dangers for employers.

Maybe we should call what's happening a risk revolution. Exposures that weren't even on science-fiction writers' radar 30 years ago are commonplace. Defining those risks and managing them can seem like a full-time job.

As Mr. Drucker wrote, it is “impossible even to guess at'' what new industries will arise, yet nearly certain they will arise. It's also certain — with no need for a "nearly' — that they will be accompanied by new exposures requiring new applications of risk management if an enterprise is to survive and prosper. And those applications will be required at an ever faster speed.